Thanks for your reply and suggestions. I have checked the Forbidden Extensions - there is no PDF listed. The strange thing is, my service provider (host) tried uploading the same PDF file which I tried and he was successful. He is looking into it but perhaps you have another suggestion?

I never use the administrative web uploader on my site, because I find FTP more convenient. If you upload the file to the extensions file directory, the extension will find the file automatically. On a default installation the file folder is at this location joomla_root_directory/administrator/components/com_nicepaypaldownloads/files

Sorry, the answer was easier than expected. It wasn't a "Nice" issue it was something to do with my service provider who had to change some kind of a setting which then allowed me to upload the files I needed.

Thanks for all your advice! it is good to hang out with people who know!